On November 2, in early Asian trading, WTI crude oil fell 5.0% during the day to US$33.98/barrel, setting the largest monthly decline since March. However, then It is reported that Russia discussed delaying the policy of reducing the scale of OPEC+ production cuts for three months, and that China planned to increase oil imports. Crude oil rebounded on the 3rd, but as Europe re-implemented blockades and new COVID-19 cases continued to increase in many parts of the world, the crude oil market There is still considerable downward pressure on prices.
As the most upstream of the polyester industry chain, the sharp drop in crude oil prices will also have a large negative effect on the market. The current polyester market The overall price is consolidating weakly. The price of PTA is around 3150-3250 yuan/ton. It has not fallen sharply with the price of crude oil. However, the price transmission has a lag, and the price of polyester filament is still under great pressure in the future.
Looking back, after the National Day, the polyester and weaving markets ushered in a “carnival”, The prices of bulk textile raw materials have gone up, creating a bright arc. At present, the production load of weaving manufacturers in Jiangsu and Zhejiang is still high, and the rigid demand for polyester filament has been guaranteed. However, the price of polyester filament suddenly stopped rising, and even dropped step by step. What is the reason?
1. Crude oil collapsed again, and the cost of polyester loosened
For October The rise in polyester filament prices and the rebound in oil prices during the National Day actually provided the initial impetus. Then, coupled with favorable factors such as the expectation of a cold winter and Double Eleven stockings, the price increase momentum began to ferment. Some products also experienced one price a day and a freeze. The market is reluctant to sell. However, as the epidemic in the United States and Europe worsens sharply again, the U.S. stimulus plan negotiations have stalled, the economic outlook has turned bleak, and bad news in the crude oil market continues.
Both OPEC and IEA reports show that global crude oil demand prospects are sluggish, and these factors have given oil prices Heavy pressure. After all, the blockade measures will affect people’s travel and tourism, which will cause the demand for crude oil to drop significantly, thereby putting pressure on oil prices. In the short term, with the current short-term pressure on the market, oil prices may continue to face the risk of falling. Therefore, The cost support for polyester is insufficient.
2. The inventory of raw materials is sufficient, and the purchasing mentality tends to be cautious
We have to admit that the main reason for the sharp rise in polyester filament prices this round is the smooth transfer of inventory from downstream manufacturers. Driven by demand, clothing factories and traders have surged in demand for fabrics in autumn and winter clothing, which has also driven up the demand for weaving manufacturers. production enthusiasm. In just one week, the operating rate in Jiangsu and Zhejiang increased from 75% to 90%, and the operating rate increased by 15%. It is the increase driven by demand that has enabled raw material prices to get rid of the previous downward trend and start an upward trend.
Coupled with the special market situation this year, most weaving manufacturers are The stocking of raw materials has not been strong. Driven by the current market situation and the mentality of buying up and not down, weaving manufacturers’ raw material inventory has also reached a new high this year. According to research, most manufacturers have raw material inventory on hand of 20-20. About 30 days, many even stocked it for more than 2 months.
It can be seen from the recent polyester production and sales chart that the downstream demand for raw materials has increased in the past 10 days. The purchase intention is not high, because the raw material inventory on hand has not been exhausted, and coupled with the current sharp decline in crude oil, many textile bosses are not optimistic about the future raw material prices. Therefore, in the short term, most bosses have adopted the most conservative operations. “Consume inventory and purchase on demand.”
3. Early stocking has cooled down, and the market mentality has become more rational
Demand is the most critical factor in verifying whether the market has truly improved. For textile bosses, life in 2020 has not been easy. In October, the market ushered in the busiest market of the whole year. At that time, replenishment and order placement were relatively intensive, and most weaving manufacturers also performed well in destocking. However, the arrival of this wave of market conditions is not actually caused by the real recovery of the terminal market.
On the one hand, due to the impact of the epidemic this year, many terminal brands have been under great operating pressure and have reduced their stockpiling of raw materials. Most service companies have purchased one-stop shopping. We put it off again and again, until October. In order to welcome Double 11, some urgent orders must be placed. In order to rush for them, companies have placed orders one after another to stock up, resulting in a huge order shortage.The place suddenly became crowded.
On the other hand is hype. The resurgence of Indian textile orders widely circulated in the market has caused companies to schedule orders until May next year. Orders in the foreign trade market have improved month-on-month, which has also caused some traders to stock up on purchases. Now that November has entered, Double 11 stocking orders have basically come to an end. Weaving manufacturers are now at the end of the execution of orders on hand, and there is insufficient follow-up for new orders, and they have become increasingly cautious about purchasing large quantities of raw materials again.
In general, polyester filament has also entered the long-short game stage. For the enterprises themselves, the current industry concentration is high, and the pressure has eased slightly after the early transfer of inventory. Therefore, there is not a strong intention to drop prices in the short term; from the demand side, downstream manufacturers currently have more or less orders on hand. Execution, although new orders are not as good as in the previous period, it is not a problem for the market to persist until mid-November. In addition, there is also great uncertainty in crude oil itself. Therefore, there is a high probability that the bottom of polyester filament yarn will be supported by power, but the upward power is also insufficient. , there is still a risk of decline in the short term! </p
